To Seek Bad Faith Tort Damages There Must be Injury in Excess of Policy Benefits
Post 5205
Read the full article at https://www.linkedin.com/pulse/payment-appraisal-award-precludes-bad-faith-claim-zalma-esq-cfe-rkzrc and at https://zalma.com/blog plus more than 5200 posts.
In Keith Frederich v. Trisura Specialty Insurance Company, No. 24-40748, United States Court of Appeals, Fifth Circuit (October 7, 2025) explained that an insured cannot maintain tort claims against an insurer if the insured has received the full appraisal award, absent evidence of an independent injury.
FACTS
Keith Frederich sued his insurer, Trisura Specialty Insurance Company ("Trisura" ), for allegedly violating the Texas Insurance Code. He appealed the grant of summary judgment in favor of Trisura.
Trisura moved for summary judgment, arguing that its payment of the appraisal award plus interest foreclosed Frederich's claims. Frederich countered that Chapter 541 allows an insured to recover tort damages that are cumulative to, and distinct from, any breach-of-contract damages. The district court granted summary judgment in favor of Trisura, concluding that Frederich had received all benefits to which he was entitled through the appraisal process and had failed to establish an independent injury.
ANALYSIS
On appeal, Frederich contended that Chapter 541 allows an insured to recover tort damages that are independent and distinct from contractual damages for breach of contract.
Trisura argued that its payment of the appraisal award plus statutory interest foreclosed all of Frederich's claims under Chapter 541. The Fifth Circuit affirmed the district court's judgment, holding that an insured cannot bring tort claims against an insurer under Chapter 541 after receiving an appraisal award and applicable statutory interest, absent an independent injury.
The Fifth Circuit explained that an insured cannot maintain tort claims against an insurer if the insured has received the full appraisal award, absent evidence of an independent injury.
Frederich's argument failed under the Fifth Circuit’s decision in Mirelez v. State Farm Lloyds, 127 F.4th 949 (5th Cir. 2025). Like Frederich, Mirelez asserted he could recover tort damages even when an appraisal award, any applicable interest, and any payments due under the insurance policy were paid out.
Because Mirelez sought no actual damages other than the policy benefits paid in accordance with the policy's appraisal provision, he could not maintain a bad faith claim under either the common law or chapter 541.
Mirelez foreclosed the insured's appeal because even if the plaintiff in Mirelez had raised the same statutory-construction argument, the panel would have rejected it as foreclosed by the Texas Supreme Court's interpretation of Chapter 541.
In sum, Mirelez foreclosed Frederich's appeal. Absent an independent injury, an insured cannot bring tort claims against an insurer under Chapter 541 after receiving an appraisal award and applicable statutory interest.
ZALMA OPINION
Bad faith suits in Texas require, among other things, damages other than a common law breach of contract. When, as here, Frederich's claims were paid in full after appraisal. As a result he incurred no damages in excess of the claim amount which was paid in full plus interest.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Post 5396
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Post 5421
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Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
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LAW:
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Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
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